August 2006

A recent issue of a publication called Nuts and Bolts, produced by the Fleet Division for the City of Westminster employees, included a section where employees can ask questions of our staff. The following question and suggestion was given.

Question: How can I check out a used car to know it is a good purchase?

Answer: The best way to check out a car if it is a used unit is to request the maintenance records and prior dealer or owner information from the current owner (if it is a private party selling). If a dealer is handling the sale ask him to provide records if maintained at their facility. If the vehicle has been in an accident you can obtain the information regarding past claims on the vehicle by paying about a $25.00 fee to search on the Vehicle Identification Number (VIN) using the CARFAX website (www.carfax.com). The fee is good for 30 days to search on any vehicle you are anticipating buying. You start the search with the VIN number and title to produce a title check history to see if the unit has been salvaged, flooded, etc., or if the unit has any reported major accidents, fire damage, was stolen, or salvaged from auction. A site to obtain a "Guide to Inspecting Used Cars" to help outline the process for purchase is www.consumerreports.org. If you are selling or purchasing, another site is Dealix On-Demand Lead Estimator (www.dealix.com/dealer/leadestimator.aspx).

The consideration given to a public entity for purchase and disposal is quite different from a private party. A Fleet Manager or in some cases Purchasing Agent has to consider the best dollar for public entity whether it be sale at auction, eBay, or possible trade-in. A new buyer should be aware of changes in eBay's regulations to make sure you have a reliable account inquiry for purchase and verify the buyer and funds before releasing the vehicle.

The following is an account from John McCorkhill, Jr., CFM, Director of Fleet Services, City of Lynchburg, Virginia, regarding how the City started using eBay options: "I began selling used fleet assets on eBay in 2002 mainly out of frustration because we were getting very little return by selling them locally at one of our conventional lot auctions. I arrived here in Lynchburg in 1999 and watched the auction process as it unfolded each May and sometimes in October when the city sold all used fleet assets and any other salvage item in the city, from computers to office furniture. The sales were mostly attended by local citizens who had been coming for years expecting to get another good deal on a used vehicle or truck. The auctioneer knew many of these folks and it seemed to me that he would bang his gavel a little too quickly to get the best price for what they were selling. I was really frustrated with the price we were getting for a used dump truck, refuse truck or some other large vehicle because they were selling for $5,000-$6,000 and I knew from my experience in Indianapolis when we sold all our large vehicles at a truck auction in Fort Wayne that we could get more.

"I kept checking around and asking what we could do to improve our sale prices, and finally Richard Bonistelli from the VDOT office in Richmond called and told me about a young guy who works for the State of Oregon Department of Administration who was selling stuff on eBay for government agencies and was doing very well at it. I contacted this person (Nole Bullock) and immediately knew based on our phone call that he knew what he was doing. In August 2002 I signed a memorandum of understanding with the agency he represents called Oregon State Agency for Surplus Property (ORSASP) which is part of the State of Oregon government.

"Nole and his partner, Neil Howard, list for us all fleet assets we wish to sell on eBay. We provide them with digital photographs and a detailed writeup of the assets and they do everything else, which includes doing the actual listing on eBay, accepting the bid prices and negotiating with potential buyers, collecting the money and sending us a notice of who to release the equipment to when somebody comes to pick it up. For this service they charge us $260 to sell a light-duty vehicle like a car and 7% of the selling price to sell something large like a dump truck. If the buyer uses a credit card we also have to absorb the 1.8% fee for the use of a card and any special advertising which we very seldom use.

"We've increased our proceeds for large trucks tremendously and it's not unusual to get $14,000-$18,000 for the things that formerly sold for $5,000-$6,000. We've found we can sell cars better locally, although we no longer do the normal auction but do a sealed bid sale that we manage ourselves without an auctioneer. What I like about using the State of Oregon for our listings is they basically do everything for us and we don't have to worry about collecting money and all the other things you run into when you manage your own online sales.

The following is another testimonial about using eBay to sell vehicles, supplied by Tracy S. Kline, CPPB, Procurement Specialist, City of Longmont, Colorado: "The City of Longmont has found using electronic auction websites, such as eBay, to be very helpful in the disposition of surplus material. We haven't purchased much on these sites but the selling has been beneficial.

"We have sold over $200,000 of vehicles on eBay in the last year alone. While most auction hosts charge 8%-50% commission, we have chosen to use eBay for our vehicles as they charge us a flat fee of $80.00 per vehicle.

"Selling on these sites is not a cure-all for disposing of surplus materials, but for those items that might not have a local market, the electronic auction sites are a good fit. We found that selling specialized vehicles such as fire trucks, recycle trucks, CNG vehicles, and motorcycles are all good candidates for us. These sites have large diversified audiences with buyers that assume all the risk on a transaction. We require buyers to wire good funds directly to our account and have them make all shipping arrangements. This all sounds pretty nifty until something goes wrong. With the first vehicle we sold on eBay, the buyer backed out which cost us an extra $40.00 to relist it, though it sold for $2,000 more! Another typical problem may be that the vehicle was described poorly or not enough pictures were taken. You will know when that happens as you will be flooded with questions.

"There is a learning curve setting up and maintaining an auction. I suggest that if your municipality is going to try their hand at electronic auctions, you have someone conduct it that has some experience in selling on these sites, start with an inexpensive item, and work closely with the departments releasing the items. Selling items on an electronic website may not benefit your organization, but for the City of Longmont it has worked well for us. The best-kept secret about selling on auction sites is that it can be fun, and having fun at work is at a premium—so don't tell anybody and I won't either." (Tracy S. Kline can be reached at 303-651-8344 or tracy.kline@ci.longmont.co.us.)

The preparation you put into purchasing a vehicle—the time you spend with your operators, Department Heads, Utilization Committee, Purchasing and City/County Managers office—will pay off in the long run by coordinating the equipment to do the job and trying to stay within a reasonable budget. You should include the preparation time for the replacement projections to allow for review of equipment, cost and equipment option investigation, possible demonstration of equipment, and coming to agreement on priority of equipment. Finally, it is important to consider the wants versus needs of the use of the equipment. Have fun shopping and keep in mind the importance of what you do!